Moratorium under insolvency law bars SARFAESI possession steps and supports restoration of corporate debtor premises.

Moratorium under the Insolvency and Bankruptcy Code prevailed over inconsistent SARFAESI enforcement, so possession proceedings against the corporate debtor during CIRP were impermissible. The Tribunal found that the secured creditor had proceeded with possession despite the insolvency bar and without due process, making the action contrary to the Code. It also granted protective relief by directing return of physical possession of the B Wing premises and restraining further unilateral action concerning the A Wing premises to preserve the corporate debtor's possession and records.

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Issues: (i) Whether initiation and continuation of action under the SARFAESI Act against the corporate debtor during the moratorium period was impermissible under the Insolvency and Bankruptcy Code, 2016. (ii) Whether the Resolution Professional was entitled to restoration of physical possession of the B Wing premises and restraint against further action in respect of the A Wing premises.

Issue (i): Whether initiation and continuation of action under the SARFAESI Act against the corporate debtor during the moratorium period was impermissible under the Insolvency and Bankruptcy Code, 2016.

Analysis: The application was founded on the moratorium then in force during CIRP and on the overriding effect of the Insolvency and Bankruptcy Code, 2016. The secured creditor's recourse to possession under the SARFAESI Act was examined against the statutory bar created by moratorium. The order also noted that the respondent was aware of the insolvency process, yet proceeded to take possession without due process.

Conclusion: Action under the SARFAESI Act during the subsistence of moratorium was held impermissible and contrary to the Code.

Issue (ii): Whether the Resolution Professional was entitled to restoration of physical possession of the B Wing premises and restraint against further action in respect of the A Wing premises.

Analysis: The Tribunal accepted the complaint that possession of the B Wing premises had been taken forcibly and that notices under the SARFAESI Act were pasted in relation to both wings despite the moratorium. On that basis, protective relief was warranted to secure the corporate debtor's premises and records and to prevent further unilateral action by the respondent.

Conclusion: The application was allowed, physical possession of the B Wing premises was directed to be returned, and further action in relation to the A Wing premises was restrained.

Final Conclusion: The decision enforced the statutory moratorium under insolvency law over inconsistent recovery steps under SARFAESI and granted protective relief to preserve the corporate debtor's possession and records.

Ratio Decidendi: Where a moratorium under the Insolvency and Bankruptcy Code is in force, a secured creditor cannot lawfully proceed with possession or enforcement measures under the SARFAESI Act against the corporate debtor, and the Tribunal may restore possession and restrain further coercive action.

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